Equity and the Convergence of Nationally Determined Climate Policies

Abstract

By adopting the Paris Agreement on climate change the world community has agreed on global goals for climate policy. However, by relying on voluntary contributions and respecting national circumstances it does not ensure efficient and equitable country policies. To derive guidelines for a fair burden sharing between countries the paper applies welfare theory and combines it with general equity principles. The procedure selects those national circumstances which are suitable for internationally acceptable policies. The concept is then compared to policies formulated by purely selfish countries. A convergence process closing the gap between country contributions and the Optimum international climate policy is developed. It is argued that equity-based signals can be a forceful means supporting this process.